United-Guardian(UG) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2025 were $2,481,127, a decrease of 23.7$3,254,944 in Q1 2024[11] - Net income for Q1 2025 was $560,895, down 39.4$925,442 in Q1 2024[11] - Earnings per share (basic and diluted) decreased to $0.12 in Q1 2025 from$0.20 in Q1 2024[11] - Total net sales for the three months ended March 31, 2025, were $2,481,127, down from$3,254,944 in the same period of 2024, representing a decline of approximately 23.7%[52] - Revenue from pharmaceutical sales increased to $1,168,458 in Q1 2025, compared to$950,323 in Q1 2024, reflecting a growth of approximately 23%[52] - Net sales for Q1 2025 decreased by $773,817 (approximately 24$11,691,416 in Q1 2025 from $12,665,551 in Q4 2024, a decline of 7.7$1,927,638 in Q1 2025, compared to $1,914,469 in Q4 2024[17] - Cash and cash equivalents at the end of Q1 2025 were$1,269,212, down 32.3% from $1,875,655 at the end of Q4 2024[14] - Cash held in excess of FDIC limits was approximately$962,000 as of March 31, 2025, compared to $234,000 at December 31, 2024[38] - Working capital decreased by$987,304 to $9,763,778 at March 31, 2025, down from$10,751,082 at December 31, 2024[104] Expenses - Research and development expenses increased to $114,394 in Q1 2025 from$102,982 in Q1 2024, reflecting a growth of 11.5%[11] - Operating expenses increased by $63,870 (approximately 11$11,412 (approximately 11%) in Q1 2025 compared to Q1 2024, driven by increased payroll-related expenses[99] - The provision for income taxes for Q1 2025 was $147,064, a decrease from$240,734 in Q1 2024, with federal income taxes current provision at $107,860 compared to$169,940 in the prior year[67] Dividends - Dividends declared and paid in Q1 2025 were $1,607,893, compared to$1,148,468 in Q1 2024, an increase of 40%[24] - The company declared a cash dividend of $0.35 per share in January 2025, totaling$1,608,012, compared to a dividend of $0.25 per share totaling$1,148,580 in January 2024[82][83] Market and Distribution - The company entered a distribution agreement with Brenntag Specialties for its new Natrajel® line, expecting to begin sales in 2025[27] - The company expanded its presence in the sexual wellness market by partnering with Brenntag Specialties to distribute the new Natrajel line across North and South America, with manufacturing and revenue expected to begin in 2025[86] - A new territory, South Korea, was added for personal care distribution in February 2025, expanding the relationship with Azelis Group NV, which also includes the medical market in the UK and Ireland[87] - Approximately 29% of total sales in Q1 2025 were to customers outside the United States, up from 13% in Q1 2024[52] - Three pharmaceutical distributors and one cosmetic ingredient distributor accounted for 67% of gross sales in Q1 2025, down from 83% in Q1 2024[76] Cash Flow - The company generated cash from operations of $322,080 in Q1 2025, down from$644,120 in Q1 2024, primarily due to a decrease in net income[107] - Net cash used in financing activities increased to $1,607,893 in Q1 2025 from$1,148,468 in Q1 2024, due to higher dividend payments[109] Other Financial Metrics - The allowance for credit losses related to accounts receivable increased to $18,114 as of March 31, 2025, compared to$14,342 on December 31, 2024[41] - The company recognized net gains of $12,350 on marketable securities for the three months ended March 31, 2025, compared to$41,496 in the same period of 2024[60] - As of March 31, 2025, total marketable securities amounted to $6,851,997, with an unrealized gain of$42,834 compared to a total of $7,522,625 and an unrealized gain of$28,977 as of December 31, 2024[62][63] - The company reported proceeds from the redemption of marketable securities of $6,148,493 in Q1 2025, including realized losses of$1,507, compared to $150,000 with no realized gains or losses in Q1 2024[64] - Cost of sales as a percentage of net sales decreased to 45% in Q1 2025 from 48% in Q1 2024, attributed to lower per-unit overhead rates[97] - The effective income tax rate was approximately 21% for both Q1 2025 and Q1 2024, expected to remain stable for the current fiscal year[103] Supply Chain and Risks - The company is monitoring the impact of global supply chain instability and tariffs, particularly concerning imports from China[33] - The company has a significant concentration of receivables, with potential risks associated with the financial position of a small number of customers[55]